Tag: NEM-Watch

Our CEO, Paul McArdle has provided insights to Duncan Hughes from the Australian Financial Review in regards to how a power upgrade delay may cost energy users.

The article begins:

“DEFERRING until 2015 a $120 million upgrade of an electricity interconnector between Queensland and NSW will cost energy users about $5 billion in higher charges, major energy users say.

They claim an arcane formula – called the regulatory test – used to assess the merits of boosting the interconnector fails to take account for the real impact of the outcome on their costs.”

With the author quotes Paul commenting on the situation’s effects:

“Paul McArdle, managing director of market monitor NEM-Watch, said higher generating prices in summer peak periods would raise costs by $690 million a year, or about $5 billion for the next seven years.”

Duncan Hughes from The Australian Financial Review has sought clarification using NEM-Watch to explain why the national electricity market was a “whisker short of a blackout” on a Tuesday night in June 2007.

Using a snapshot of NEM-Watch, Mr Hughes was able to illustrate how spot prices peaked:

According to NEM-Watch, a specialist software provider, a snapshot of the eastern seaboard and South Australia on Tuesday at 5:45pm, revealed spot prices paid by retailers hit more than $9400 MWH in Queensland, $9100 MWH in NSW, $7500 MWH in Victoria and more than $4500 MWH in South Australia.

NEM-Watch managing director Paul McArdle said at the peak of demand, national reserves were about 7 percent of capacity, or half of the typical back up of the national electricity market.

In the height of summer 2005-06 a journalist at The Age, Rod Myer, wrote this article “Power to cut out the middleman” to highlight a different approach a number of large industrial energy users were adopting to lower their average cost of energy consumed, whilst at the same time providing a valuable service to the market in helping to mitigate peak demand.

The article begins:

“SEVERAL Australian businesses are choosing to manage their exposure to the national electricity market directly rather than contract with retailers. And many who choose to go down this path are providing much needed backup for the power system by turning their plant off when power prices spike.”

Given that our company has been active in facilitating Demand Response for a number of years, it made sense that our comment was sought about this emerging opportunity for energy users.

The author notes our CEO, Paul McArdle, as commenting that:

“… companies using Global Roam software had added about 200 megawatts of demand-side response to the market by cutting use at certain trigger power prices.”